Chris Gerlach, vice president of insights and analytics, U.S. Apple, recently discussed how tariffs will affect the apple industry. However, it isn’t clear what the rates will be, who will retaliate or to what extent.

“USDA says the top production year for apples was in 2014 with 282 million bushels,” said Gerlach. “Based on estimates, the new maximum production year was last season with around 289 million bushels.”

As of December 2024, the U.S. was moving more than the average number of apples due to that high production. “We had a lot of apples leftover, and about four out of 10 apples sold during harvest were the prior season’s apples,” said Gerlach.

Fresh apple consumption in the 1980s and ‘90s was close to 20 lbs./person, but that rate has been falling. The latest data show consumption at about 16 lbs./person.

A heavy crop a decade ago resulted in prices falling 12% throughout the season. “We had an even bigger fall this time,” said Gerlach. “We were at a higher point and had further to fall.”

The most notable grower price for last season was for Honeycrisp, which started high – between $65 and $70 for a 40-lb. tray pack – but fell throughout the season to $30/box.

“When Honeycrisp was discounted, every other variety had to be discounted in order to move,” he said. “Grannies were down 45%, Goldens down 20%, Fuji down 18%. Galas started down then recovered because they were short last year. Red Delicious were down close to 30%.”

Prices have started to recover this year, especially for Honeycrisp, which is up 121%. “Unfortunately, we aren’t having as much reverse cascading effect,” said Gerlach. “They’re pulling up prices as much as we saw them pushed down last season. Grannies, Goldens and Red Delicious are all down.”

USDA started tracking Cosmic Crisp® prices in November 2024, and reported Honeycrisp and Cosmic Crisp are down 22%.

Gerlach discussed the primary grower concern: how tariffs will impact the apple industry. “Imports and exports from Canada and Mexico are USMCA and are exempt from tariffs,” he said. “That include apples at this point, but as we know, anything can change. It’s assuming the apples are fully grown in those countries and whether that can be proven.”

Tariff exemption will require appropriate recordkeeping for exemption eligibility, but that can change and retaliation could occur.

To review: The U.S. can place a tariff (or tax) on goods imported from foreign countries. U.S. companies importing those goods must pay the tariff to the American government. The result is increased cost of goods that will likely result in reduced buying from those suppliers.

“To the extent possible, U.S. customs will pass along the cost of the tariff to retailers and consumers,” said Gerlach. “In turn, U.S. retailers pass along the higher cost to consumers in order to maintain their margins, and the U.S. consumer faces higher retail prices.”

Fresh apples currently have a healthy positive trade balance. “We send out close to 47 million bushels and bring in only about 4 million bushels,” said Gerlach. “For dried apples, we’re exporting 1.5 million pounds and bringing in close to 13 million pounds for a negative balance.”

Apple juice has a huge negative balance – the U.S. sends out 16 million gallons and brings in 430 million gallons.

The challenges and direct effects of U.S. tariffs on imports include price increases for both fresh apples and processed apple products. While prices will increase for growers, especially for processing apples, as there’s more demand for them, supplies become more expensive. This results in higher prices for domestic processing apples.

“The severity of impacts will be determined by relative tariff levels, global supply, capacity constraints and the ease by which importers can switch from one producer or country to another,” said Gerlach. “The harder it is to switch, the more someone will be stuck with higher costs.”

Tariffs and the affected dollar volume are theoretical based on no change in buying behavior and volume. “It’s important to note that even the threat of tariffs was enough to damage relationships,” he said. “Some of those deals were cancelled even if tariffs didn’t go into place. It’s important to know that words matter and relationships are built over a long time.”

Dried apples are an important aspect of world apple trade, with Chile, China, Argentina, New Zealand and Turkey receiving the most product from the U.S. Juice importers will feel the pinch if they can’t find a way to change.

In speaking with processors, Gerlach said it’s unclear if switching apple juice concentrate suppliers is any easier. “I’m already hearing these are year-long and sometimes longer and they may be able to get out of some of these deals, but that burns bridges,” he said. “I think they’re going to do whatever they can. They saw this coming, and the U.S. buyers of foreign juice have stockpiled as much as they can and have seven to 12 months’ supply on hand while they figure out other markets.”

Domestic capacity for juice production isn’t sufficient to satisfy demand. There are discussions around ramping up domestic production, but that takes time and investment. In an uncertain future, the U.S. will likely continue to rely on foreign suppliers.

Prices are beginning to move ahead of potential tariffs, and some countries are making major changes. China has traditionally relied on Ukraine for much of its grain supply, but with the current situation, China has begun to rip out processing apple orchards in favor of creating space for growing grain. The resulting shortage of Chinese juice may have caused a run on other sources and started to increase prices ahead of tariffs.

“It isn’t just about taking tariffs to zero,” said Gerlach. “There are other non-trade tariff barriers that can be negotiated. The severity of these impacts will be determined by the scale and scope of the retaliations or capitulations and the ability to develop new markets more quickly than older markets are lost.”

by Sally Colby